Lincoln County A&L Committee moves to forward Pine Crest offer to purchase to full County Board for consideration

Pine Crest Nursing Home in Merrill. Tina L. Scott photo.


The Administrative & Legislative (A&L) Committee held a special meeting on Monday, Feb. 12, 2024, to review and consider an offer provided by broker Marcus & Millichap for the purchase of Pine Crest Nursing Home. An Asset Purchase Agreement presented by the proposed buyer, Merrill Campus, LLC and Senior Management, Inc., proposed an $8.5 million purchase price for the real estate and buildings/improvements and fixtures for both Pine Crest Nursing Home at 2100 E. 6th St. and the Health & Human Services (HHS) Building located at 607 N. Sales Street. The two buildings are physically adjoined and share HVAC and other systems, and the real estate boundaries were established via a Certified Survey Map recorded with the Lincoln County Register of Deeds on Dec. 7, 2023.
After an hour in closed-session deliberations, the A&L Committee returned to open session to take action and, after a motion by District 18 Supervisor Ken Wickham, a second by District 20 Supervisor Angela Cummings, and discussion, the Committee unanimously voted to forward the Asset Purchase Agreement for the full County Board to consider at their Feb. 19, 2024, County Board meeting and to direct corporate counsel to draft a resolution accordingly. District 10 Supervisor Jesse Boyd and Cummings agreed to co-sponsor the resolution.

Proposed purchaser background: A history of high-quality skilled nursing home care

Grant Thayer is listed as the registered agent of the proposed buyer, Merrill Campus, LLC, which was formed in Wisconsin in early November 2023 with a Ladysmith, Wis. address, and as the CEO of Senior Management, Inc., with a Batavia, Ill., mailing address, a company organized in Minnesota in 2004. He signed the proposed Asset Purchase Agreement.
At the onset of the discussion portion of the meeting, Boyd said: “I’d like to just point out that I am very, very impressed with the potential purchase individual … [and] I’m very impressed with the effort and dedication that this team and the individuals involved have put forth. I believe that we are on the path of success for keeping residents in Lincoln County. And with this purchase agreement, it lays out a lot of positives for Lincoln County. And I’m proud to have my name on that resolution.”
Members of the A&L Committee said Thayer and his wife own five other skilled nursing facilities in Wisconsin:

  • Care & Rehab Ladysmith 1
  • Care & Rehab Ladysmith 2
  • Care & Rehab Cumberland
  • Care & Rehab Barron
  • Care & Rehab Boscobel

“I had the opportunity to do some research on the potential buyer and actually tour one of their nursing homes,” Wickham said. “And I also attended the Town Hall on Pine Crest … and heard the concerns and the measures that were put forward on what constitutes a good nursing home, the concerns that were expressed on private versus county owned. And my takeaway from that was … the five-star rating, the comparison of staffing, how many hours are spent with staff, the residents who receive antipsychotic medications, long-stay residents/short-stay residents who newly received antipsychotic medications, and percentage of residents who receive an antianxiety or hypnotic medication, as well as long-stay residents with pressure ulcers.” [See the chart he prepared to show comparisons between each of those five nursing homes and Pine Crest.]
“I went out and looked at the nursing homes that the buyer actually owns,” he said. “He owns the nursing homes. He does not sublet or give them to a property manager or something … this company owns them, manages them, and administers them.”
“They have nursing homes that are in rural Wisconsin, are very similar communities as we have here,” Wickham said. He said he prepared the comparison so that he could vote in clear conscience on the proposal based on facts and not emotion.
One of the concerns heard from area opposition to the sale of Pine Crest was that a new purchaser would not take as many Medicaid residents. Wickham said his research put that concern to rest for this proposed buyer. “They have an 80 percent Medicaid residency,” he said.
Another concern has been the five-star rating. “Pine Crest is currently a five star rating,” Wickham said. “In the last 10 years, Pine Crest has had 2 five-star ratings.”
A comparison shows three of the five facilities owned by the proposed buyer currently have five-star ratings and all five of the other facilities were five-star rated in at least 2 of the last 10 years, just like Pine Crest, with three of the facilities being five-star rated in 5 of the last 10 years, which is better performance than Pine Crest’s ratings.
“Out of the last 10 years, that to me speaks that you have some well run nursing homes,” he said.
“This is fact. It’s not based on hearsay. It’s not biased and it answers the concerns that were expressed,” Wickham said, “that these nursing homes don’t take on the residents, drug them up, put them in a corner.”
A careful study of Wickham’s chart shows some of these nursing homes are significantly better than state averages and in some cases, have a 0% of antipsychotic, antianxiety, or hypnotic medications. On numerous comparisons, the Thayer-owned nursing homes performed better than Pine Crest’s existing ratings and, while Pine Crest was rated worse than the state-average in three of the five comparison categories, none of the Thayer-owned nursing homes were rated worse in more than one or two of those same comparison categories.
“I think we need to get by the perception … that government versus private, that government is always going to be better,” Wickham said. “That’s not the case. It’s going to go both ways. There’s going to be private facilities that are worse, then there’s going to be government.”
On-site visit/tour of Thayer-owned facility
“As we toured the facility, I was very impressed … and it wasn’t a contrived visit. It was genuine,” he said. “It was neat; it was clean.”
“We weren’t restricted on anywhere that we could go … It also had assisted living facilities attached. We actually went in and were able to tour one of the residences, which is occupied by a retired Catholic sister. [It’s] very, very nice.”
Wickham said the facility had amenities including hair salons and a calendar of social events typical with nursing homes, and a craft sale event was happening the day he was there.
“We actually ate lunch in the facility, the same food that the residents ate,” he said. “It was good food.”
“They opened up their financials for us that we were able to look at,” Wickham said. “I’m not a finance wizard, but our finance people have looked at them. They’re solid.”

Owners are proactive

“They’re very proactive,” Wickham said. “One of the things that impressed me most was how they resolved their staffing situations.”
“The owner – a man and his wife – she during COVID went out and got her CNA certification and she actually works on the floor side-by-side [with other staff]. The residents knew her; they interacted with her,” he said. “She had her dog there that day and you could tell that was a joy to the residents that were there. They really enjoyed that.”
“Also for staffing … there’s a federal government plan where you bring in foreign healthcare workers. They do that primarily from the Philippines.”
Wickham said there weren’t a large number of staff from the program, but “they were there.”
“They do it in all their nursing homes, but they also train them on-site. They have the accreditation, and we toured their training facility, and they had beds set up, they have mannequins, they had computers … They train them and then they [the trainees] go out and they have to take the same exam that everybody else takes. And then this government program offers them an opportunity, I believe it’s after two years or something, where they can apply for a permanent residency or something to do with that,” he said.
“It was very impressive,” Wickham said. They also don’t have big staffing issues. “They have people that have been there for 27 years, at least I know their nursing director had been there for 27 years. They’re having very low turnover rate.”
He said he also saw evidence that they are very involved in the community when he was there and that “the owners themselves were involved in some community activities.”
He said it was a very, very nice facility and the experience was genuine. “I have not toured the other facilities,” Wickham said, “but when you have their five stars, you have all this. I would assume they’re very similar. So I’m very comfortable.”
“Can I just say that in the reading of the agreement and the vetting, that it’s a quality nursing facility that wants to retain our residents and our employees and work with them in a professional and qualified manner,” Cummings said.

Details of the proposed agreement

As indicated, the proposed offer is for $8.5 million, and the proposed purchaser’s intent is to procure the necessary licenses to operate Pine Crest as a 120-bed certified skilled nursing facility. As a condition of sale, the purchaser represents and warrants it is their intent to continue to operate Pine Crest as a skilled nursing facility.
The allocation of the $8.5 million purchase price is broken down as follows:

Nursing Home Land $9,400
Nursing Home Land Improvements $90,300
Nursing Home Building $6,130,600
Nursing Home Fixed Equipment $1,361,300
Nursing Home Moveable Equipment $408,400
HHS Building $500,000
Total $8,500,000

The agreement would exclude County-owned property used in the operation of the Health Department and Department of Social Services (DSS) and related departments in the HHS Building not used in the operation of Pine Crest, all personal property owned by other tenants that currently occupy space in the HHS Building, and all tools owned by Lincoln County maintenance staff and County-owned Milwaukee battery-operated power tools.
The proposed purchaser made an initial deposit of $10,000 – currently being held by their attorney – which would be held in trust by the escrow agent in an interest-bearing account if the Lincoln County Board of Supervisors approves the agreement, and an additional $100,000 earnest money deposit would then also be due within five days, also to be held in escrow until closing.
Per the terms of the agreement, another $6,390,000 would be due at closing and the proposed buyer has already secured financing for this portion of the purchase so the offer has no financing contingency.
Then, Lincoln County would finance the remaining $2 million as an installment sale for a period of five years with 59 payments of $12,652.99 to begin 30 days after closing until the 60th and final balloon payment of $1,666,652.61 is due. This would be secured by a second mortgage on the property. County officials said this enables Lincoln County to retain a vested interest in both Pine Crest Nursing Home and the HHS Building for five more years for the benefit of the community.
Lincoln County and the other tenants of Lincoln County that currently lease space at the HHS Building would continue to lease space from the new owner for that five-year period.
According to the proposed agreement, closing would take place on June 30, 2024, with official ownership to transfer effective July 1, 2024 at 12 a.m.

Next steps

The full Lincoln County Board will now consider a resolution to accept the Asset Purchase Agreement at this months’s regular County Board meeting this Monday, Feb. 19. A majority of the County’s 22 Supervisors will need to approve the resolution for the sale to move forward.

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